After the dust settled, Bank Transfer Day turned out to be but a blip on the radar during last fall’s groundswell of anti-bank sentiment. The Occupy movement was longer-lasting — it’s still going on in various forms, we’ve heard — and the simple fact that many Americans have a visceral disgust for the institution they trust with all their money remains the same. But not nearly as many people switched during Bank Transfer Day as many observers thought. There’s a reason for that, and it has nothing to do with forgiveness of big banks. According to a new report by Javelin Research — people seek convenience from their banks, and convenience can keep people with financial institutions that they hate.

Derek Markham/flickr source

But this doesn’t mean all hope is lost for small banks, or that big banks can relax, according to Mark Schwanhausser, co-author of the report.

“[They] can find lots of reasons to say ‘Bank Transfer Day is something I don’t have to worry about’ or ‘I dodged a bullet,’ but at the same point [they] have to come to an awareness that there are a lot of dissatisfied consumers out there.”

A total of 11 percent of consumers, according to Javelin’s research, stated that they are “likely or very likely to switch” banks in the next year. Citibank and Bank of America scored the worst in the customer satisfaction department. A full 25 percent of Citibank customers said they are likely or very likely to leave their banks within the next 12 months, and 21 percent of Bank of America customers said the same. Chase and Wells Fargo did substantially better: 12 percent and 14 percent, respectively.

“Those are alarmingly high numbers,” said Schwanhausser.

Too poor to care about?

Many commentators at the time pointed out that those interested in Bank Transfer Day were likely to be young and broke. The thinking goes like this: If you’re worried about a $5 monthly fee with a $1,500 minimum balance waiver, you can’t possibly have that much money, and therefore you aren’t the sort of mass affluent customer that Bank of America — or whoever — wants to keep around anyway. In this myopic and rather callous view of things, you’re not a profitable customer if you don’t like fees. But Javelin’s research indicates otherwise: The 11 percent of customers interested in switching represent $675 billion in deposits as a group, and that their average deposits are 30 percent higher than the “unlikely to switch” group’s average deposits.

And despite the fact that this group of people is slightly more affluent, Schwanhausser said: “When people are thinking about switching, the No. 1 reason is too many fees.” A full third of respondents who switched cited fees as their reason, followed by 21 percent who complained about customer service, 15 percent who found their bank inconveniently located, and 12 percent who moved to a new area.

Location and convenience, on the other hand, are the things that can help banks keep customers around. According to Javelin’s research 42 percent stayed put because their branch was in a convenient location — the number one response — followed by 40 percent who were satisfied with the online services, 30 percent who liked the lack of fees, and 25 percent who found the ATMs to be conveniently located.

And so, services like mobile banking, mobile deposit and nearly-ubiquitous ATMs have helped big, supposedly evil banks hang on to their customers. From the report: “Giant banks will continue to dominate smaller rivals because their customers have established significantly deeper, hard-to-break habits of weekly use of self-service offerings such as online banking, bill pay, online transfers, ATM usage, and mobile banking.”

While big banks ought to be pleased that their services — which, ironically, create the need for fees — successfully retain customers, but that doesn’t mean they’re in a good position. They ought to be asking themselves a number of questions, says Schwanhuasser: “Do I have a solid hold on my customers going forward? Do I still have a lot of dissatisfaction? If so how do i deal with that?” One in four Citibank customers has indicated they want to leave the bank — that’s a big deal.

Mobile is the way to Gen Y’s heart

Still, because of young people’s smartphone obsession, megabanks still have a hold on us, despite our overrepresentation in the Occupy movement. “[Big banks] are doing a better job of attracting Gen Y,” said Schwanhausser, “and Gen Y happens to want more of the kinds of services that are going to play an increasingly important role going forward.”

If locations and convenience are two of the reasons that small banks and credit unions aren’t winning with younger consumers, then adopting more mobile technology appears to be the best way forward. Schwanhausser points out that by introducing features like mobile deposit, you obviate the need for a vast ATM network. Customers can take cash out basically anywhere — getting it into their account is the problem.

There were many other factors that went into small banks’ inability to score big last November. Among them was “entanglement” — with automated bill pay and direct deposit, it can be a pain to untangle all the automated conveniences your bank offers, which can quell even the most vociferous protester. And then there’s the fact that switching banks isn’t the most vociferous thing a person can do.

“Switching banks is a silent protest; if you have a point, you want people to hear your point.” Switching to smaller bank isn’t a particularly loud form of protest, especially when it introduces a laundry list of minor inconveniences into your life.

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